Let the $67bn Debate Begin

01 Feb 2013

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Guest Columnist:  Femi Fani-Kayode

I think that it is a pity that President Goodluck Jonathan's government declined to take up the challenge of the former Minister of Education, Mrs.Obiageli Ezekwesili, to a public debate on the $67 billion savings that former President Olusegun Obasanjo left behind in 2007.  I do not think that our government ought to have run away from the debating ring. They ought to have accepted the challenge of a rigorous public debate and allow the Nigerian people to listen to it and make up their own minds about who was right and who was wrong.

I thought that the response of the Special Assistant to the President on Public Affairs, Dr. Doyin Okupe, to Ezekwesili was more logical and made far more sense than that of the Minister of Information, Labaran Maku's, but I still believe that Ezekwesili was right. I believe that the government's position on this issue and its attempt to over-aggressively defend what I personally consider to be the indefensible is not only disingenuous but it is also essentially dishonest and self-seeking.

The charge that our foreign reserves were heavily depleted between 2007 and 2013 cannot be convincingly or logically denied. In 2007, Obasanjo left $45 billion in our foreign reserves and $22 billion in our Excess Crude Account (ECA). If the two figures are added up, the amount that you will come up with is $67 billion of savings for our country. This is the figure that Ezekwesili cited. It represents what was in both our foreign reserves and our ECA put together.

Let us look at the history. When Obasanjo came to power in 1999, Nigeria only had $1.5 billion in her foreign reserves and consequently no one in the world took us seriously. We were poor, weak and lonely and we were viewed as a failed state and a pariah nation. No one trusted us, no one wanted to do business with us and no one seriously believed that we as a people or as a nation were capable of enduring the rigours of serious economic recovery, prudence and fiscal discipline. As far as the developed world was concerned, Nigeria was only good for its endless supply of sweet bonny light crude oil. Yet Obasanjo proved the world wrong and showed them that Nigerians could do far better than they thought. After eight years of good stewardship and the display of fiscal discipline and remarkable prudence, he built up those foreign reserves from a measly and pitiful $1.5 billion in 1999 to no less than $45 billion by 2007.

This was quite an achievement yet sadly what took place after Obasanjo left power was very disheartening. It was not only a downer but it was also sad and unfortunate.  I say this because by the Federal Government’s own admission, and four long years after leaving $45 billion for the Umaru Musa Yar’Adua administration to build on in 2007, we still only have that same figure of $45 billion left in our foreign reserves today. Worse still, this was after it had plummeted to a shameful $30 billion under late President Yar’Adua. Had it not been for the fact that whatever was coming in after we left in 2007 and over the last four years was being recklessly shared and spent by the Yar’Adua and later Goodluck Jonathan’s administrations our foreign reserves ought to have doubled and reached at least $100 billion by now. That is just the foreign reserves alone and I am not even adding the ECA figures yet.  If I were to do that, I would be talking about an expected increase of up to $150 billion by today. That is what we ought to have in the savings kitty today if the two governments that succeeded Obasanjo knew anything about prudence, good management and fiscal discipline.

The difference is that under Obasanjo it was “save, save, save” whilst under Yar’Adua and later Jonathan it has been “spend, spend, spend”.  Yet if they insist on spending, the question is what do they have to show for such high expenditure and what has this cost the Nigerian people in real terms. I believe that these are legitimate questions. Ezekwesili may have been inelegant or a little too harsh in her use of words when she made those weighty assertions in her speech but her analysis and conclusions surely cannot be faulted. Yet the government has given no reasonable explanation or response to her or the Nigerian people and they do not even appear to like the fact that questions are being asked.

As a matter of fact, they appear to believe that it is an achievement for us to be exactly where we were four years ago in terms of our foreign reserves by openly boasting that we have $45 billion saved today. The questions that we should put to them are as follows - did you not save anything in the last four years in either foreign reserves or the Excess Crude Account? Where did all the money that accrued to you that you ought to have saved go? How come four years after being handed $45 billion in foreign reserves and after billions have come into your hands through record price crude oil sales you still only have $45 billion saved? Is this not strange and absurd? Is this the way a responsive and responsible government ought to behave? Do they know the true meaning of ''saving for a rainy day''?

It is not surprising that the Prime Minister of Great Britain, the Right Hon. David Cameron, asked just a few days ago where the $100 billion that Nigeria received from oil sales in the last few years has gone. Would our government be good enough to answer his question and tell him even if they feel that they don't owe the Nigerian people themselves an explanation? As far as I am concerned, it is not something that our government should be proud of that four years after Obasanjo handed $45 billion to them as savings in foreign reserves they have not built on it in all that time but rather they have spent all the receivables and inflows that came in after that time and that ought to have been saved.

Yet, the story does not stop there. It gets worse. Apart from the sorry tale about our foreign reserves, the story about the usage and outright draining of our ECA is even more damning. It goes like this. When Obasanjo left power in 2007, the ECA had just over $22 billion in its coffers. This figure was built up by Obasanjo from zero in 1999 because at that time there was no ECA. In eight years, he built it up from zero to $22 billion. Yet when the Yar’Adua administration and later the Jonathan administration came in ALL the money in that account was shared with the state governors and spent.

The Federal Government saved nothing for a rainy day and instead chose to just spend all the money. It was initially run down to zero by Yar’Adua's government but, in fairness to President Jonathan, he has now been able to build it up to approximately $10 billion. This represents approximately half of the figure that Obasanjo left in that account in 2007 but at least it is a step in the right direction. Yet if both the Yar’Ádua and Jonathan governments had continued to save and not just spend all the money, we would have had at least $50 billion in the ECA today and not just a paltry $10 billion.

Whichever way one looks at it, when one sees all these figures and considers the strong position that we were coming from in 2007 it represents a failure in fiscal discipline by both the Yar’Adua and Jonathan administrations. This is because the Federal Government was meant to build up on the legacy that they inherited in 2007 and not spend and squander all that money. For the purpose of emphasis, permit me to repeat the fact that had they been doing the right thing in the last four years and not overspending, we ought to be hitting at least $100 billion in our foreign reserves by now and at least $50 billion in the ECA. Yet we have not seen anything near that and instead all we have seen is depletion and a drain of both accounts and the monies that ought to have accrued to them since 2007.

Finally, when Obasanjo came to power in 1999, our foreign debt was $30 billion. Yet by sheer dint of hard work by the time he left office eight years later, he had paid off the foreign debt completely and for the first time in its history, Africa had a debt-free nation. This was a monumental achievement by any standard and one that every serious-minded and patriotic Nigerian ought to be proud of no matter what side of the political divide they stand.  Yet sadly four years later we are back in chronic debt to the tune of $9 billion and we are still borrowing. In view of the foregoing, it is perfectly legitimate for anyone to ask how come so much money was spent, what it was spent on and how the government has managed our resources over the last four years. As a matter of fact not asking any questions would be most unpatriotic and it would lay some of us open to the charge of cowardice and collusion.

Since 2007, we have seen nothing but depletion of our resources and more and more borrowing. Unlike Obasanjo, both Yar’Adua and Jonathan's governments did not build up our reserves or save any money. Instead they both spent recklessly and borrowed more and more. As a matter of fact. if our government continues to borrow at the rate it has been borrowing for the last four years for another two years, Nigeria will be back to having a foreign debt of close to $30 billion very soon. That was where we were in 1999 and if that were to ever happen it would be a tragedy of monumental proportions.

I sincerely hope that other than the usual insults, intimidation, sponsored stories, persecution and baseless allegations that are channelled against and heaped on some of us for pointing out these matters and raising these questions, the Federal Government will endeavour to change its ways and display a greater degree of fiscal discipline and accountability to the Nigerian people. To that extent, I am in total agreement with my former cabinet colleague in the Obasanjo administration, Ezekwesili.

Tags: Backpage, $67bn, DEBATE

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